Sparkle, a Nigerian neobank has secured $3.1 million in a seed funding round to scale operations.
The round was led by Leadway Assurance with participation from Trium Network and unnamed angel investors. The investment comes after Sparkle closed a friends and family pre-seed round of $2 million within the past year.
Sparkle was founded in 2020 by Uzoma Dozie, a former CEO of Diamond Bank, before its merger with Access Bank. Sparkle is a digital bank with common features such as savings, bill payments, top-ups, requesting or sending funds etc. It also has less common features like bill splitting and reviewing spending breakdowns.
Launched in 2019, the digital bank says it has already accumulated over 40,000 customers on the individual banking side. To generate revenue, the company began charging individual customers small fees to keep their accounts running and plans to charge businesses for most features except taxation services.
Sparkle also has a platform known as Sparkle Business that aims to serve small and medium businesses. SMEs can access these features with a tax identification number (TIN) and an email address. These are the lowest forms of documentation in the market for businesses.
Sparkle claims the new business arm has caught on well with this category, which now has access to inventory and invoice management, tax advice, and payroll and employee management services. About 2,000 businesses have reportedly been onboarded to this platform.
The company’s goal is to provide financial, lifestyle and business support services to Nigerians. With this new funding, Sparkle will be building robotic process automation to help with mundane and repetitive processes, then talent acquisition across engineering, finance risk and marketing.
Unlike a lot of other startups that raise funding from institutional VC’s, Sparkle CEO said that he chose to go with this set of investors because they were familiar with the Nigerian market and had the necessary experience Sparkle needed to scale in it.
“Collectively, as a group of investors and business builders, we are Nigerians who are bullish about Nigeria and the opportunity the country presents in terms of building global networks and communities, all via one app,”Uzoma Dozie, Sparkle CEO
Sparkle’s mix of providing banking services to individuals and businesses on a single platform is what sets them apart from other digital banks.
“As a small business, I’m not carrying my bank account on my mobile. I’m carrying my business. So we are bringing everything about your business into one place so that you can do business wherever you are. For individuals, we’re bringing everything into one place so that you can do what you want to do quite easily wherever you are.”Sparkle CEO
Although still in its early years, the digital bank already has a microfinance bank license. It has also secured a partnership with Visa to allow users to make in-person or digital payments with a Visa card. Other partnerships are with companies like Network International and PwC Nigeria.
The increasing adoption of technology in banking is proving very effective in driving financial inclusion in Nigeria. This is especially so with access to mobile broadband connections now approaching 50%. Sparkle is leveraging technology to provide not only financial services but also lifestyle and business support services to Nigerians
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